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The Turkish Wage Curve: Evidence from the Household Labor Force Survey

Author

Listed:
  • Baltagi, Badi H.

    (Syracuse University)

  • Baskaya, Yusuf Soner

    (University of Glasgow)

  • Hulagu, Timur

    (Central Bank of Turkey)

Abstract

This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey (HLFS) including 26 NUTS-2 regions over the period 2005-2008. When the local unemployment rate is treated as predetermined, there is evidence in favor of the wage curve only for younger and female workers. However, if the lagged unemployment rate is used as an instrument for current unemployment rate, we find an unemployment elasticity of -0.099. We also find a higher elasticity for younger, less educated, low experienced workers than for older, more educated and more experienced workers. Another important finding is that the wages of females in Turkey are significantly more responsive to local unemployment rates than their male counterparts.

Suggested Citation

  • Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2011. "The Turkish Wage Curve: Evidence from the Household Labor Force Survey," IZA Discussion Papers 5633, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5633
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    Cited by:

    1. Dieter von Fintel, 2017. "Institutional wage-setting, labour demand and labour supply: Causal estimates from a South African pseudo-panel," Development Southern Africa, Taylor & Francis Journals, vol. 34(1), pages 1-16, January.
    2. Yusuf Soner Baskaya & Timur Hulagu, 2011. "Informal-Formal Worker Wage Gap in Turkey : Evidence From A Semi-Parametric Approach," Working Papers 1115, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    3. Kosfeld, Reinhold & Dreger, Christian, 2019. "Towards an East German wage curve - NUTS boundaries, labour market regions and unemployment spillovers," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 115-124.
    4. Gonca Konyalı, 2012. "Wage Curve Evidence From Turkey’s 2007-2009 Income and Living Conditions Survey," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 24, pages 199-210.
    5. Badi H. Baltagi & Yusuf Soner Başkaya, 2022. "Spatial wage curves for formal and informal workers in Turkey," Journal of Spatial Econometrics, Springer, vol. 3(1), pages 1-24, December.
    6. Ipek Ilkkaracan & Haluk Levent & Sezgin Polat, 2013. "Exploring different measures of wage flexibility in a developing economy context: the case for Turkey," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(3), pages 297-315, May.
    7. Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2013. "How different are the wage curves for formal and informal workers? Evidence from Turkey," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 271-283, June.
    8. Blien, Uwe & Messmann, Susanne & Trappmann, Mark, 2012. "Do reservation wages react to regional unemployment?," IAB-Discussion Paper 201222, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Dieter von Fintel, 2016. "Wage flexibility in a high unemployment regime: spatial heterogeneity and the size of local labour markets," Working Papers 09/2016, Stellenbosch University, Department of Economics.
    10. Haci Mevlut Karatas, 2017. "The Turkish Spatial Wage Curve," Econometrics, MDPI, vol. 5(3), pages 1-21, August.
    11. Cholezas, Ioannis & Kanellopoulos, Nikolaos C., 2015. "Labour market reforms in Greece and the wage curve," Economics Letters, Elsevier, vol. 136(C), pages 19-21.
    12. Ana Maria Bonomi Barufi & Eduardo Amaral Haddad & Peter Nijkamp, 2023. "Urban agglomeration, city size, and spatial density effects on wage flexibility: New evidence on the wage curve in Brazil," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(9), pages 1998-2025, December.
    13. Constantin ILIE & Margareta ILIE & Ionut ANTOHI, 2022. "Data Management in Unemployment and Education in the Field of B&A for Women," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 60-68.

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    Keywords

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    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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